First Merchants to acquire First Savings in $241.3 million deal

MUNCIE/JEFFERSONVILLE, Ind. - First Merchants Corporation (NASDAQ:FRME), a $2.28 billion market cap bank with a "GOOD" InvestingPro Financial Health score, has entered into a definitive merger agreement to acquire First Savings Financial Group, Inc. (NASDAQ:FSFG) in an all-stock transaction valued at approximately $241.3 million, the companies announced Thursday.

Under the agreement, First Savings shareholders will receive 0.85 shares of First Merchants common stock for each First Savings share, representing $33.60 per share based on First Merchants’ closing price of $39.53 on September 24, 2025. First Merchants, currently trading at an attractive P/E ratio of 10.2, is considered undervalued according to InvestingPro Fair Value analysis.

Jeffersonville-based First Savings operates 16 banking centers in southern Indiana with $2.4 billion in total assets, $1.9 billion in loans, and $1.7 billion in deposits. The bank reported a 1.02% return on average assets and 13.7% return on average equity for the quarter ended June 30, 2025.

First Merchants anticipates approximately 11% earnings per share accretion in 2027, the first full year of combined operations, with a tangible book value earnback period of 3.0 years.

"First Savings Bank is a meaningful addition to our Indiana deposit network," said Mark Hardwick, CEO of First Merchants, according to the press release.

Following the merger, the combined entity will have approximately $21 billion in assets and 127 branches across Indiana, Michigan, and Ohio. First Merchants will remain the second largest financial holding company headquartered in Indiana. The bank has demonstrated strong shareholder commitment, having raised its dividend for 13 consecutive years with a current yield of 3.64%.Discover more insights about First Merchants and access comprehensive analysis with InvestingPro’s detailed research report, part of our coverage of over 1,400 US stocks.

Larry W. Myers, President and CEO of First Savings, is expected to join First Merchants’ Board of Directors upon completion of the merger.

The transaction is expected to close in the first quarter of 2026, subject to regulatory approvals and First Savings shareholder approval. System integration is anticipated during the second quarter of 2026.

Stephens Inc. is serving as financial advisor to First Merchants, while Piper Sandler & Co. is advising First Savings.

In other recent news, Fermi America has filed for a listing on the Nasdaq stock exchange under the ticker symbol ’FRMI.’ The company has enlisted UBS Investment Bank, Cantor, and Mizuho as the book-running managers for the offering. This move is part of Fermi America’s strategy to expand its financial reach and visibility in the market. Meanwhile, First Merchants Corporation has declared a quarterly cash dividend of $0.36 per common share. The dividend is scheduled to be paid on September 19, 2025, to shareholders who are on record as of September 5, 2025. This announcement maintains the same payout level as the company’s previous distribution. These developments highlight the ongoing activities and strategic decisions being made by both companies.

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